Aussie jailed in US for $196m mobile phone fraud

Aussie jailed in US for $196m mobile phone fraud

DARCY Wedd, a former high-flying executive who began his career selling fluffy toys door-to-door in Western Australia and went on to run a mobile phone business in the US, has been jailed for 10 years for a $US150 million ($196 million) fraud scheme.

Wedd's sentencing in a Manhattan court presented two contrasting profiles of the 40-year-old Australian.

US federal prosecutors portrayed the Dampier-born Wedd as remorseless and pivotal in the fraud scheme "that stole money from victims, $US9.99 at a time" by auto-subscribing mobile phone users to recurring horoscope, celebrity gossip and trivia text message services.

Wedd and his co-conspirators netted more than $US150 million in illegal profits and used it to fund lavish lifestyles of expensive vacations, luxury cars and gambling, prosecutors said.

"As the court knows, the defendant was at the epicentre of a massive fraud that stole money from millions of Americans," prosecutors wrote in a sentencing memo.

Wedd personally received more than $US1.7 million in fraud proceeds.

He was convicted by a Manhattan jury in December last year after a two-week trial and sentenced on Monday.

His mother Bea McKinley described Wedd as having a heart of gold while Wedd's partner Ashley Cole and a long list of friends from Western Australia also offered glowing tributes.

"Darcy started his working life at 15," his mother wrote in an emotional letter to the judge.

"After school he walked door to door with a large bag selling fluffy toys."

Wedd was the chief operating officer, and eventually the chief executive officer, of Mobile Messenger, a US aggregation company in the mobile phone industry.

The court heard Wedd moved from Western Australia to Sydney in 2003 or 2004 to work for Mobile Messenger as a salesperson.

In 2004 Mobile Messenger planned to expand to the US and Wedd volunteered to move to America to develop the business and received a five per cent equity stake in the company.

In 2006 a hedge fund purchased a 65 per cent stake in Mobile Messenger for $US65 million ($85 million), Wedd retained a 1.7 per cent equity share and in 2009 the company had just under 250 employees, the court heard.

"Customers who entrusted their mobile phone numbers to Mobile Messenger found themselves victimised because Wedd directed his subordinates to sell those customers' numbers to co-conspirators, and then permitted those co-conspirators to auto-subscribe the customers," prosecutors said.

The Australian is the 10th person caught by authorities for participating in the fraud, with eight others pleading guilty and another convicted last September.

Wedd argued at his sentencing that, as an Australian, he faces deportation from the US so could serve a portion of his sentence "under unusually harsh conditions" at a contract Criminal Alien Requirement prison.